Suppose a firm uses workers and office space to produce output. The firm is locked into a year-long lease on its office space, but it can easily vary the number of employee-hours it uses each day. The accompanying table describes the relationship between the number of employee-hours the firm uses each day and the firm's daily output. Each unit of output sells for $2, the hourly wage rate is $14, and the rent on the office space is $50 per day.Employee-Hours Per DayOutput Per Day0014048091201516023200 When the firm uses 9 employee-hours per day, its total revenue each day is:
A. $160.
B. $18.
C. $120.
D. $240.
Answer: D
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Refer to Figure 12-4. If the market price is $30, the firm's profit-maximizing output level is
A) 0. B) 130. C) 180. D) 240.
To decrease buyer power, the firm can
a. Differentiate its product b. Decrease dependency on a single buyer c. Sell its products in locations with multiple buyers d. All of the above
Money is:
A. the set of all assets that are regularly used to directly purchase goods and services. B. represented only by the amount of dollars and coins in our economy. C. controlled by the supply and demand of goods and services on which our money is spent. D. anything that we use to buy goods and services as long as it is not a good itself.
Why might a system of marketable pollution permits lead to a higher concentration of polluted areas than would a command-and-control system?
What will be an ideal response?